Both the National Living and the National Minimum wage are going up on 1 April 2017. By law you must pay workers at least the appropriate National Living or National Minimum Wage depending on their age and whether they’re an apprentice. The rates are outline below and click here to find out more information.

As an employer you have a duty to be aware of and comply with the different legal National Minimum and Living Wage rates. If you need more information about the legal requirements then you can seek advice from Acas: www.acas.org.uk/nmw.

Even if you are paying the correct minimum rates you should be aware of some common mistakes made when calculating worker’s wages which can result in not complying with the law. Examples include:

• Paying staff at the wrong rate by failing to implement annual rate increases, missing birthdays and therefore not moving workers from one age band to another or making errors in applying the apprentice rates. For example, apprentices are entitled to the apprentice rate only if they’re either aged under 19 or aged 19 or over and in the first year of their apprenticeship. So an apprentice aged 22 in the second year of their apprenticeship, for example is entitled to the higher minimum hourly rate for their age band.
• Making deductions or payments connected to the job, which take pay below the legal rates. For example, asking staff to pay for uniforms, tools and safety clothing.
• Including tips, shift allowances or bonuses as a part of staff pay.
• Unpaid working time, which essentially are additional hours worked but not paid. These can be regular periods of time such as time spent helping to shut up shop or clear security after an employee’s shift has ended. They can also be longer periods spent training or ‘down time’ waiting for example. Other common unpaid working time errors include travelling time if it’s in connection with the worker’s job, such as between assignments.
• Worker status errors by mistakenly (or intentionally) treating workers as either volunteers, or self-employed. Whilst genuine volunteers and self-employed aren’t entitled to the National Minimum or National Living Wage, workers are sometimes being treated as such in order to circumvent legal employer responsibilities.

The Government is committed to ensuring all employers are compliant with minimum wage legislation and the effective enforcement of it and will spend a record £25.3 million on enforcement over the next year.

If HMRC finds that an employer hasn’t paid the National Minimum or Living Wage the employer will have to pay any arrears to the worker together with a penalty. The employer may also be named in the media. Last year HMRC helped over 58,000 workers who received arrears totalling £10.3m.